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Tiger Airways changes its stripes

Budget carrier Tiger Airways announced a livery change Wednesday as part of a broader rebranding of the airline as TigerAir. CEO Rob Sharp was positive, saying that the move from the leaping tiger to a clean “TigerAir” motif on a white background reflects the “key elements of TigerAir’s personality: warm, passionate and genuine.”

tiger

Mr Sharp noted that the “news is much more than just a fresh coat of paint and a new logo — it is the start of the revival of our airline here in Australia and should be seen as reinforcement of our commitment towards continuous innovation and improvement.” The rebranding comes just days from the finalisation of Virgin Australia’s (ASX: VAH) 60% takeover of Tiger.

When the Australian Competition and Consumer Commission reviewed the takeover in April, it noted that Tiger was unlikely to survive in the local market unless the takeover proceeded. This is highlighted by the $69 million loss reported for 2012-13. The result was a slight improvement on the 2011-12 loss of $77 million.

Mr Sharp noted the past performance of the company, saying that Tiger “[had] come a long way over the past two years … however we have a long way to go. Our two key priorities now are to create a stronger operating platform that can deliver growth and to build a sustainable business that brings greater competition to the Australian budget carrier market.”

Key to the turnaround is reversing sentiment of customers turned off the airline by delayed flights and poor customer service in the past. TigerAir has introduced a new website and updated marketing material in line with the rebranding. Closing the announcement, Mr Sharp hoped that customers would return: “Those that try us do return and recognise we provide the ability to travel whenever you choose, regardless of budget.”

Foolish takeaway

TigerAir is the new Tiger Airways. The rebranding has taken place as part of the rebirth of the airline under part-ownership by Virgin Australia. While past performance is still affecting sales, the new logo and renewed focus on customer service may be enough to turn the budget airline around. Coupled with the experience of Virgin, the return to profitability for TigerAir may be closer than expected.

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Motley Fool contributor Andrew Mudie does not own shares of any companies mentioned in this article.

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